[Federal Register Volume 67, Number 53 (Tuesday, March 19, 2002)]
[Rules and Regulations]
[Pages 12446-12458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6212]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1437

RIN 0560-AG20


Noninsured Crop Disaster Assistance Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule.

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SUMMARY: The Commodity Credit Corporation (CCC) amends the regulations 
with respect to the Noninsured Crop Disaster Assistance Program (NAP). 
This interim rule amends the NAP regulations to remove area 
requirements, announce new requirements regarding the filing of 
applications, payment of service fees, and reporting of crop acreage, 
yield, and production. These regulatory amendments are designed to 
improve the overall operation of the program and to conform the 
regulations with changes to the program made in recent legislation.

DATES: The rule is effective March 19, 2002. Comments must be received 
by April 18, 2002, to be assured of consideration.

ADDRESSES: Comments should be addressed to Steve Peterson, Chief, 
Noninsured Assistance Programs Branch (NAPB); Production, Emergencies, 
and Compliance Division (PECD); Farm Service Agency (FSA); United 
States Department of Agriculture, STOP 0517, 1400 Independence Avenue, 
SW., Washington, DC 20250-0517; e-mail [email protected].

FOR FURTHER INFORMATION CONTACT: Steve Peterson, Chief, Noninsured 
Assistance Programs Branch (NAPB); Production, Emergencies, and 
Compliance Division (PECD); Farm Service Agency (FSA); United States 
Department of Agriculture, STOP 0517, 1400 Independence Avenue, SW, 
Washington, DC 20250-0517; telephone (202) 720-5172; facsimile (202) 
690-3646; e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule is issued in conformance with Executive Order 12866 and 
has been determined to be economically significant and therefore has 
been reviewed by the Office of Management and Budget (OMB). A summary 
of the Cost-Benefit Assessment follows the Background section.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because neither FSA nor the CCC is required by 
5 U.S.C. 533 or any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will have no significant impact on the quality of the human 
environment. Therefore, neither an environmental assessment nor an 
environmental impact statement is needed.

Executive Order 12988

    The rule has been reviewed in accordance with Executive Order 
12988. The provisions of this rule preempt State laws to the extent 
such laws are inconsistent with the provisions of this rule. Before any 
judicial action may be brought concerning the provisions of this rule, 
the administrative remedies must be exhausted.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR Part 3015, subpart V, 
published at 49 FR 29115 (June 24, 1983). Unfunded Mandates Reform Act 
of 1995 (UMRA)
    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the UMRA for State, local, and tribal 
governments or the private sector. Thus, this rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Paperwork Reduction Act

    This rule amends current regulations to reference changes to NAP 
made by amendments to section 196 of the Federal Agriculture 
Improvement and Reform Act of 1996 (1996 Act). The Paperwork Reduction 
Act generally requires a 60-day public comment period and OMB review of 
the information collections before regulations may be promulgated. 
However, section 161 of the 1996 Act provided that the Secretary issue 
regulations without regard to the Paperwork Reduction Act. A separate 
notice announcing a 60-day comment period will be published and OMB 
approval sought under the provisions of 44 U.S.C. chapter 35.

[[Page 12447]]

Executive Order 12612

    It has been determined that this rule does not have sufficient 
Federalism implications to warrant the preparations of a Federalism 
Assessment. The provisions contained in this rule will not have a 
substantial direct effect on States or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of Government.

Federal Assistance Programs

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Background

    This rule re-writes, in their entirety, the Noninsured Crop 
Disaster Assistance Program (NAP) regulations to improve the overall 
administration of the program and to conform with statutory amendments 
to section 196 of the Federal Agriculture Improvement and Reform Act of 
1996 made in section 109 of the Agricultural Risk Protection Act of 
2000 (Pub. L. 106-224; June 20, 2000) (``ARPA 2000''). Section 
171(b)(2)(g) of ARPA 2000 specified that the amendments to NAP would 
not be effective until the 2001 crop year. Also, prior to enactment of 
ARPA 2000, section 101 of the Omnibus Consolidated Appropriations Act, 
2000 (Pub. L. 106-113; November 29, 1999) provided that beginning with 
the 1999 crop year CCC should provide up to $20 million to eligible 
producers without regard to the regulatory requirement for area crop 
losses. CCC put into place procedures to identify and provide 
assistance to producers who would have been eligible for assistance if 
not for the area crop loss requirement.
    The changes made to NAP by ARPA 2000 were significant and involved 
major changes in the way producers will qualify or retain eligibility 
for NAP. There, the NAP statute was amended to remove the area crop 
loss requirement entirely. In addition, the statute has been amended to 
require an application and collection of a service fee. Producers now 
must apply for NAP no later than the application closing date announced 
by the Secretary. Additionally, producers must now pay a service fee of 
$100 per crop per administrative county, or $300 per producer per 
administrative county, up to a maximum, for all counties for the 
producer, of $900. Service fees for limited resource producers may be 
waived. CCC will use the definition of limited resource farmer provided 
in FCIC regulations found at 7 CFR 457.8 for the purpose of defining 
limited resource producers. Typically, under current regulations, 
limited resource producers have an annual gross income of $20,000 or 
less from all sources for the last 2 years, or farm less than 25 acres 
with most of their income of $20,000 or less per year coming from 
farming. This criteria, for NAP purposes, is subject to change as 7 CFR 
457.8 is amended. Because of the timing involved, for certain 2001 and 
2002 crops, special time periods have been created for submission of 
the application for NAP coverage and service fees. To maintain 
eligibility for 2001 and 2002 crops, producers who otherwise would be 
late in filing the application must apply and pay the service fee 
within 30 days of publication of this rule. NAP continues to require 
crop reporting as a condition of eligibility. Every year producers must 
provide records of crop acreage, yields, and production.
    As a condition of eligibility, NAP benefits are earned only when a 
loss or prevented planting occur as a result of an eligible loss 
condition (disaster) as opposed to some other reason. It is a 
producer's responsibility to show that the producer's claimed loss or 
prevented planting was the result of an eligible cause. Accordingly, 
for clarification purposes, this rule better describes (without any 
change to policy) those loss conditions and crops for which benefits 
under this part might be exacted. For example, a definition of 
``controlled environment'' has been added; the definition of ``natural 
disaster'' has been removed and the term is discussed under Sec. 1437.9 
``Causes of Loss;'' sections were added discussing several crops for 
which coverage is available; and generally, language in various 
sections have been amended for clarity. Effective for the 2002 and 
succeeding crop years the exclusion of unseeded forage on Federal- and 
State-owned land as an eligible crop is removed.

Cost-Benefit Assessment

    NAP expenditures for crop years 1996 through 1998 averaged about 
$43 million per year. Outlays generally occur in the fiscal year 
following the crop year. The President's budget baseline (prior to 
enactment of Public Law 106-224) assumed the NAP program would cost $90 
million each year. Outlays have never reached that expectation, in part 
due to generally favorable weather conditions throughout the U.S. and 
to the reluctance of producers to report acreage and production when 
the area loss threshold had not been triggered. But that very 
reluctance to report makes it difficult for the area loss threshold to 
trigger.
    The 2000 Act, by removing the area trigger requirement, removed 
this impediment. That is, if a producer has the requisite crop loss (50 
percent or more), the producer will be eligible to receive NAP 
benefits. The producer no longer has to farm in an area where the yield 
for the crop had to fall below 65 percent of the expected area yield to 
receive a payment.
    Participation in the 1999 Crop Disaster Program (CDP) provides some 
insight into the cost of the NAP program. The CDP provided payments to 
producers who suffered a 35-percent crop loss. Eligible crops include 
insurable crops (crops eligible for crop insurance) and non-insurable 
crops (crops eligible for NAP). Total claims for the CDP program were 
about $2 billion (before application of the payment limit and before 
the national factor). Out of the $2 billion, about $375 million was 
paid out for crops that are eligible for NAP; the remaining funds went 
to crops that were eligible for crop insurance.
    The CDP paid producers for quantity losses in excess of 35 percent 
at 65 percent of the market price. The NAP program pays producers for 
quantity losses in excess of 50 percent at 55 percent of the market 
price. When the CDP applications were screened for those producers 
meeting the more restrictive loss requirements and adjustments were 
made in the payment rates, the $375 million in benefits for non-insured 
crops under CDP dropped to about $150 million under the NAP.
    The number of NAP participants ranged from a low of about 6,500 in 
1997 to a high of over 25,000 in 1996. More than 50,000 producers 
received CDP benefits for crops eligible for NAP. Each producer 
received, on average, payments for about two crops. If 75,000 producers 
were to enroll in the new NAP, averaging two crops per producer, about 
$15 million would be collected annually in service fees.
    The total cost of NAP would be $147 million annually ($162 million 
in benefits less the $15 million in service fees). Compared with 
projected NAP outlays in the President's Budget of $90 million, CCC 
outlays would increase by $57 million annually. Compared with average 
NAP outlays of $43 million in fiscal years 1997 to 1999, CCC outlays 
would increase by $104 million annually. The outlays would partially 
offset lower income due to the weather-related crop losses. Farm income 
would increase by a like amount.
    The above cost projections assume that unseeded forage on Federal 
and State lands is eligible for NAP benefits.

[[Page 12448]]

It is estimated that 62 million acres of unseeded forage on Federal and 
State lands would become eligible under the new rule. If 10 percent of 
these acres could not be grazed due to a natural disaster, CCC outlays 
would increase by $12 million.
    This rule is issued as an interim rule and will be effective while 
comments are being received. As this rule implements provisions of the 
Federal Agriculture Improvement and Reform Act of 1996, section 161 of 
that Act exempts this rule from prior comment. Likewise section 172 of 
ARPA 2000 suggests quick implementation. Delay in implementing the new 
statutory law would be contrary to the public interest and law. 
Likewise, as to 5 U.S.C. 808 it has been determined for the same 
reasons that a lay-over for Congressional review would be contrary to 
public interest. Similarly, for those amendments not compelled by 
recent statutory changes, the improvement of the program should benefit 
the overall administration of the program and corrections based on 
comments can be made as needed. Accordingly, it has been determined 
that it would be contrary to the public interest to withhold those 
changes and those changes likewise are made effective immediately. All 
of the corrections and amendments are set out in the full text of 7 CFR 
part 1437 in this interim rule. Comments, favorable and unfavorable, 
are solicited on all aspects of the rule.

List of Subjects in 7 CFR Part 1437

    Agricultural commodities, Disaster Assistance, Reporting and record 
keeping requirements.


    For the reasons set out above, 7 CFR part 1437 is revised to read 
as follows:

PART 1437--NONINSURED CROP DISASTER ASSISTANCE PROGRAM

Subpart A--General Provisions
Sec.
1437.1  Applicability.
1437.2  Administration.
1437.3  Definitions.
1437.4  Eligibility.
1437.5  Coverage period.
1437.6  Application for coverage and service fee.
1437.7  Records.
1437.8  Unit division.
1437.9  Causes of loss.
1437.10  Notice of loss and application for payment.
1437.11  Average market price and payment factors.
1437.12  Crop definition.
1437.13  Multiple benefits.
1437.14  Payment and income limitations.
1437.15  Miscellaneous provisions.
Subpart B--Determining Yield Coverage Using Actual Production History
1437.101  Actual production history.
1437.102  Yield determinations.
1437.103  Determining payments for low yield.
1437.104  Honey.
1437.105  Maple sap.
1437.106-1437.200  [Reserved]
Subpart C--Determining Coverage for Prevented Planted Acreage
1437.201  Prevented planting acreage.
1437.202  Determining payments for prevented planting.
1437.203-1437.300  [Reserved]
Subpart D--Determining Coverage Using Value
1437.301  Value loss.
1437.302  Determining payments.
1437.303  Aquaculture, including ornamental fish.
1437.304  Floriculture.
1437.305  Ornamental nursery.
1437.306  Christmas tree crops.
1437.307  Mushrooms.
1437.308  Ginseng.
1437.309  Turfgrass sod.
1437.310-1437.400  [Reserved]
Subpart E--Determining Coverage of Forage Intended for Animal 
Consumption
1437.401  Forage.
1437.402  Carrying capacity.
1437.403  Determining payments.
1437.404  Information collection requirements under the Paperwork 
Reduction Act; OMB control number.

    Authority: 15 U.S.C. 714 et seq.; and 7 U.S.C. 7333.

Subpart A--General Provisions


Sec. 1437.1  Applicability.

    (a) The Noninsured Crop Disaster Assistance Program (NAP) is 
intended to provide eligible producers of eligible crops coverage 
equivalent to the catastrophic risk protection level of crop insurance. 
NAP is designed to help reduce production risks faced by producers of 
commercial crops or other agricultural commodities. NAP will reduce 
financial losses that occur when natural disasters cause a catastrophic 
loss of production or where producers are prevented from planting an 
eligible crop.
    (b) The provisions contained in this part are applicable to 
eligible producers and eligible crops for which catastrophic coverage 
under section 508(b) the Federal Crop Insurance Act (7 U.S.C. 1508(b)), 
as amended, or its successors, is not available.
    (c) The regulations of this part are applicable to the 2001 and 
subsequent crop years.


Sec. 1437.2  Administration.

    (a) NAP is administered under the general supervision of the 
Executive Vice-President, CCC (who also serves as Administrator, Farm 
Service Agency), and shall be carried out by State and county FSA 
committees (State and county committees).
    (b) State and county committees, and representatives and their 
employees, do not have authority to modify or waive any of the 
provisions of the regulations of this part.
    (c) The State committee shall take any action required by the 
regulations of this part that the county committee has not taken. The 
State committee shall also:
    (1) Correct, or require a county committee to correct, any action 
taken by such county committee that is not in accordance with the 
regulations of this part; or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with this part.
    (d) No provision or delegation to a State or county committee shall 
preclude the Executive Vice-President, CCC, or a designee, from 
determining any question arising under the program or from reversing or 
modifying any determination made by a State or county committee.
    (e) The Deputy Administrator may authorize State and county 
committees to waive or modify deadlines (except statutory deadlines) in 
cases where lateness to file does not adversely affect operation of the 
program.


Sec. 1437.3  Definitions.

    The definitions and program parameters set out in this section 
shall be applicable for all purposes of administering the Noninsured 
Crop Disaster Assistance Program provided for in this part. Although 
the terms defined in part 718 of this title and part 1400 of this 
chapter shall also be applicable, the definitions set forth in this 
section shall govern for all purposes of administering the Program.
    Actual Production History (APH) means the farm's operative 
production history established in accordance with subpart B of this 
part.
    Administrative county office means the county FSA office designated 
to make determinations, handle official records, and issue payments for 
the producer in accordance with 7 CFR part 718.
    Animal Unit Days (AUD) means an expression of expected or actual 
stocking rate for pasture or forage.
    Application Closing Date means the last date, as determined by CCC, 
producers can submit an application for coverage for noninsured crops 
for the specified crop year.
    Catastrophic coverage means a catastrophic risk protection (CAT) 
level

[[Page 12449]]

of crop insurance available in accordance with section 508(b) of the 
Federal Crop Insurance Act, as amended.
    Catastrophic loss means--
    (1) Loss, as the result of an eligible cause of loss, that entails 
as determined by CCC:
    (i) Prevented planting of greater than 35 percent of the intended 
crop acreage; a yield loss of greater than 50 percent of the approved 
yield; or value loss of greater than 50 percent of the pre-disaster 
value; or
    (ii) AUD loss of greater than 50 percent of the expected AUD.
    (2)The quantity will not be reduced for any quality consideration 
unless a zero value is established.
    Controlled environment means, with respect to those crops for which 
a controlled environment is expected to be provided, including but not 
limited to ornamental nursery, aquaculture (including ornamental fish), 
and floriculture, an environment in which everything that can 
practicably be controlled with structures, facilities, growing media 
(including but not limited to water, soil, or nutrients) by the 
producer, is in fact controlled by the producer.
    Crop year means the calendar year in which the crop is normally 
harvested or in which the majority of the crop would have been 
harvested. For value loss and other specific commodities, see the 
applicable subpart and section of this part. For crops for which 
catastrophic coverage is available, the crop year will be as defined by 
such coverage.
    Fiber means a slender and greatly elongated natural plant filament, 
e.g. cotton, flax, etc. used in manufacturing, as determined by CCC.
    Final planting date means the date which marks the end of the 
planting period for the crop and in particular the last day, as 
determined by CCC, the crop can be planted to reasonably expect to 
achieve 100 percent of the expected yield in the intended harvest year 
or planting period.
    Food means a material consisting essentially of protein, 
carbohydrates, and fat used in the body to sustain growth, repair, and 
vital processes including the crops used for the preparation of food, 
as determined by CCC.
    Good farming practices means the cultural practices generally used 
for the crop to make normal progress toward maturity and produce at 
least the individual unit approved yield. These practices are normally 
those recognized by Cooperative State Research, Education, and 
Extension Service as compatible with agronomic and weather conditions.
    Harvested means the producer has removed the crop from the field by 
hand, mechanically, or by grazing of livestock. The crop is considered 
harvested once it is removed from the field and placed in a truck or 
other conveyance or is consumed through the act of grazing. Crops 
normally placed in a truck or other conveyance and taken off the crop 
acreage, such as hay are considered harvested when in the bale, whether 
removed from the field or not.
    Industrial crop means a commercial crop, or other agricultural 
commodity utilized in manufacturing. Industrial crops include caster 
beans, chia, crambe, crotalaria, cuphea, guar, guayule, hesperaloe, 
kenaf, lesquerella, meadowfoam, milkweed, plantago, ovato, sesame and 
other crops specifically designated by CCC.
    Intended Use means for a crop or a commodity, the end use for which 
it is grown and produced.
    Multiple planted means the same crop is planted and harvested 
during two or more distinct planting periods in the same crop year, as 
determined by CCC.
    Normal harvest date means the date harvest of the crop is normally 
completed in the administrative county, as determined by CCC.
    Seed crop means propagation stock commercially produced for sale as 
seed stock for eligible crops.
    Seeded forage means forage on acreage mechanically seeded with 
forage vegetation at regular intervals, at least every 7 years, in 
accordance with good farming practices.
    T-Yield means the yield which is based on the county expected yield 
of the crop for the crop year and is used on an adjusted or unadjusted 
basis to calculate the approved yield for crops covered under the NAP 
when less than four years of actual, assigned, or appraised yields are 
available in the APH data base.
    Transitional yield means an estimated yield of that name provided 
in the Federal Crop Insurance Corporation (FCIC) actuarial table which 
is used to calculate an average/approved APH yield for crops insured 
under the Federal Crop Insurance Act when less than four years of 
actual, temporary, and/or assigned yields are available on a crop by 
county basis.


Sec. 1437.4  Eligibility.

    (a) Noninsured crop disaster assistance for low yield or prevented 
planting is available to producers of eligible commercial crops or 
other agricultural commodities, as determined by CCC, for which:
    (1) Catastrophic coverage is not available; or
    (2) Catastrophic coverage is available in the administrative 
county, however, the eligible commercial crop or other agricultural 
commodity is affected by an eligible cause of loss, as determined by 
CCC, that is not covered by the catastrophic coverage.
    (b) Noninsured crop disaster assistance for low yields or prevented 
planting is available only when loss of the crop occurs as a result of 
an eligible cause of loss, as determined by CCC.
    (c) When other conditions are met, NAP may be available for an 
eligible loss of:
    (1) Any commercial crop grown for food, excluding livestock and 
their by-products;
    (2) Any commercial crop planted and grown for livestock 
consumption, including but not limited to grain and forage crops; 
except for the 2001 and preceding crop years assistance for forage 
produced on Federal- and State-owned lands is available only for seeded 
forage.
    (3) Any commercial crop grown for fiber, excluding trees grown for 
wood, paper, or pulp products; and
    (4) Any commercial production of:
    (i) Aquacultural species (including ornamental fish);
    (ii) Floricultural crops;
    (iii) Ornamental nursery plants;
    (iv) Christmas tree crops;
    (v) Turfgrass sod;
    (vi) Industrial crops; and
    (vii) Seed crops.


Sec. 1437.5  Coverage period.

    (a) The coverage period is the time during which coverage is 
available against loss of production of the eligible crop as a result 
of natural disaster.
    (b) The coverage period for annual crops, including annual forage 
crops, begins the later of 30 calendar days after the date the 
application for coverage is filed; or the date the crop is planted, not 
to exceed the final planting date; and ends on the earlier of the date 
harvest is complete; the normal harvest date of the crop in the area; 
the date the crop is abandoned; or the date the crop is destroyed.
    (c) Except as otherwise specified in this part, the coverage period 
for biennial and perennial crops begins 30 calendar days after the 
application closing date; and ends as determined by CCC.
    (d) Except as otherwise specified in this part, the coverage period 
for value loss crops, including ornamental nursery, aquaculture, 
Christmas tree crops, ginseng, and turfgrass sod; and other eligible 
crops, including

[[Page 12450]]

floriculture and mushrooms begins 30 calendar days after the 
application closing date; and ends the last day of the crop year, as 
determined by CCC.
    (e) The coverage period for honey begins 30 calendar days after the 
application closing date and ends the last day of the crop year, as 
determined by CCC.
    (f) The coverage period for maple sap begins 30 calendar days after 
the application closing date and ends on the earlier of the date 
harvest is complete; or the normal harvest date.
    (g) For biennial and perennial forage crops the coverage period 
begins the later of 30 calendar days after the application closing 
date; for first year seedings, the date the crop was planted; or the 
date following the normal harvest date. The coverage ends on the normal 
harvest date of the subsequent year.


Sec. 1437.6  Application for coverage and service fee.

    (a) With respect to each crop, commodity or acreage, producers must 
file an application for coverage under this part no later than the 
application closing date.
    (b) The service fee must be paid at the time of the application. 
The service fee is $100 per crop per administrative county, up to $300 
per producer per administrative county, but not to exceed $900 per 
producer.
    (c) The service fee will be applied per administrative county by 
crop definition and planting period, as determined by CCC.
    (d) Limited resource farmers may request that the service fee be 
waived and must request such a waiver prior to, or at the same time the 
application for coverage is filed. For this purpose, a ``limited 
resource farmer'' shall be given the meaning assigned by 7 CFR 457.8.
    (e) For 2001 and 2002 crops for which the application closing date 
would normally have been established prior to March 19, 2002, or 
established within 60 calendar days after March 19, 2002, producers 
must within 30 calendar days after March 19, 2002:
    (1) Submit a 2001 or 2002 crop application for coverage, as 
applicable, and pay the applicable service fee; and
    (2) Certify the 2000 and 2001 crop year production for the crop, if 
applicable.
    (f) For 2001 and 2002 crops which have suffered damage or loss, 
producers must, in addition to paragraph (e)(1) of this section, have 
complied with all requirements of this part prior to its revision on 
March 19, 2002, (and contained in the 7 CFR, parts 1200 to 1599, 
edition revised as of January 1, 2002) including having filed a timely:
    (1) Report of acreage;
    (2) Notice of loss; and
    (3) Application for payment.


Sec. 1437.7  Records.

    (a) Producers must maintain records of crop acreage, acreage 
yields, and production for the crop for which an application for 
coverage is filed in accordance with Sec. 1437.5. For those crops or 
commodities for which it is impractical, as determined by CCC, to 
maintain crop acreage, yields or production, producers must maintain 
records, in addition to the available records required by this section, 
as may be required in subparts C, D and E, of this part. Producers must 
retain records of the production and acreage yield for a minimum of 3 
years for each crop for which an application for coverage is filed in 
accordance with Sec. 1437.6. Producers may be selected on a random or 
targeted basis and be required to provide records acceptable to CCC to 
support the certification provided. For each crop for which producers 
file an application for payment in accordance with Sec. 1437.10 that is 
harvested, producers must provide documentary evidence of production, 
acceptable to CCC, and the date harvest was completed. Such documentary 
evidence must be filed not later than the application closing date for 
the crop in the subsequent crop year. Records of a previous crop year's 
production for inclusion in the actual production history database used 
to calculate an approved yield for the current crop year must be 
certified by the producer no later than the application closing date 
for the crop in the current crop year. Production data provided after 
the application closing date in the current crop year for the crop may 
be included in the actual production history data base for the 
calculation of subsequent approved yield calculations if accompanied by 
acceptable records of production as determined by CCC. Records of 
production acceptable to CCC may include:
    (1) Commercial receipts, settlement sheets, warehouse ledger 
sheets, or load summaries if the eligible crop was sold or otherwise 
disposed of through commercial channels provided the records are 
reliable or verifiable as determined by CCC; and
    (2) Such documentary evidence such as contemporaneous measurements, 
truck scale tickets, and contemporaneous diaries, as is necessary in 
order to verify the information provided if the eligible crop has been 
fed to livestock, or otherwise disposed of other than through 
commercial channels, provided the records are reliable or verifiable as 
determined by CCC. If the crop will be disposed of through retail 
sales, such as: roadside stands, u-pick, etc. and the producer will not 
be able to certify acceptable records of production, the producer must 
request an appraisal of the unit acreage prior to harvest of the crop 
acreage.
    (b) Producers must provide verifiable evidence, as determined by 
CCC, of:
    (1) An interest in the commodity produced or control of the crop 
acreage on which the commodity was grown at the time of disaster; and
    (2) The authority of the applicable individual to execute program 
documents.
    (c) Reports of acreage planted or intended but prevented from being 
planted must be provided to CCC at the administrative FSA office for 
the acreage no later than the date specified by CCC for each crop and 
location. Reports of acreage filed beyond the date specified by CCC for 
the crop and location may, however, be considered timely filed if all 
the provisions of 7 CFR 718.103 are met. In the case of a crop-share 
arrangement, all producers will be bound by the acreage report filed by 
the landowner or operator unless the producer files a separate acreage 
report prior to the date specified by CCC for the crop and location. 
Reports of acreage planted or intended and prevented from being planted 
must include all of the following information:
    (1) Number of acres of the eligible crop in the administrative 
county (for each planting in the event of multiple planting) in which 
the producer has a share;
    (2) Zero acres planted when the producer's crop for which an 
application for coverage was filed, is not planted;
    (3) The producer's share of the eligible crop at the time an 
application for coverage was filed;
    (4) The FSA farm serial number;
    (5) The identity of the crop, practices, intended uses, and for 
forage crops, the predominant species or type and variety of the 
vegetation;
    (6) The identity of all producers sharing in the crop;
    (7) The date the crop was planted or planting was completed, 
including the age of the perennial crops; and
    (8) The acreage intended but prevented from being planted.
    (d) Producers receiving a guaranteed payment for planted acreage, 
as opposed to receiving a payment only upon delivery of the production 
must provide documentation of any written or verbal contract or 
arrangement with the buyer to CCC. Net production, as determined

[[Page 12451]]

by CCC, may be adjusted upward by the amount of production 
corresponding to the amount of the contract payment received.
    (e) Producers must provide documentation of any salvage value 
received by or made available for the quantity of the crop or commodity 
that cannot be marketed or sold in any market, as determined by CCC and 
any value received by or made available for a secondary use of the crop 
or commodity.
    (f) Producers requesting payment under this part must maintain 
records which substantiate gross revenue for the tax year preceding the 
crop year for which coverage is requested.
    (g) Producers requesting a waiver of service fees as a limited 
resource producer must maintain records which substantiate annual gross 
income for the two tax years preceding the crop year for which coverage 
is requested.


Sec. 1437.8  Unit division.

    Except as determined by CCC, a unit shall be all acreage of the 
eligible crop in the administrative county operated by the same 
producer(s). In cases where the owners of land are also producers, 
units shall be further divided based on ownership interest of the land.


Sec. 1437.9  Causes of loss.

    (a) To be eligible for benefits under this part, crops must be 
damaged or prevented from being planted by drought, flood or other 
natural disasters and conditions related thereto. Not all named perils 
are eligible causes of loss for all crops. Eligible causes of loss 
include:
    (1) Damaging weather occurring prior to or during harvest, 
including but not limited to drought, hail, excessive moisture, freeze, 
tornado, hurricane, excessive wind, or any combination thereof;
    (2) Adverse natural occurrence occurring prior to or during 
harvest, such as earthquake, flood, or volcanic eruption; and
    (3) A related condition, including but not limited to heat, insect 
infestation, or disease, which occurs as a result of an adverse natural 
occurrence or damaging weather occurring prior to or during harvest, 
that directly causes, accelerates, or exacerbates the destruction or 
deterioration of an eligible crop, as determined by the Secretary.
    (b) Ineligible causes of loss include but are not limited to:
    (1) Factors or circumstances that are not the result of an eligible 
cause of loss affecting specific crop or commodity;
    (2) The negligence or malfeasance of the producer;
    (3) The failure of the producer to reseed to the same crop in those 
areas and under such circumstances where it is customary to reseed;
    (4) Failure of the producer to follow good farming practices, as 
determined by CCC;
    (5) Water contained or released by any governmental, public, or 
private dam or reservoir project, if an easement exists on the acreage 
affected for the containment or release of the water;
    (6) Failure or breakdown of irrigation equipment or facilities; or
    (7) Except for tree crops and perennials, inadequate irrigation 
resources at the beginning of the crop year;
    (8) A loss of inventory (or yield as applicable) of aquiculture 
(including ornamental fish), floriculture or ornamental nursery 
stemming from drought or any failure to provide water, soil, or growing 
media to such crop for any reason;
    (9) Any failure to provide a controlled environment or exercise 
good nursery practices where such controlled environment or practices 
are a condition of eligibility under this part.


Sec. 1437.10  Notice of loss and application for payment.

    (a) At least one producer having a share in the unit must provide a 
notice of loss to CCC in the administrative FSA office for the unit, 
within:
    (1) For prevented planting claims, 15 calendar days after the final 
planting date,
    (2) For low yield claims and allowable value loss, the earlier of:
    (i) 15 calendar days after the damaging weather or adverse natural 
occurrence, or date loss of the crop or commodity becomes apparent for 
low yield claims; and
    (ii) 15 calendar days after the normal harvest date.
    (b) For each crop for which a notice of loss is filed, producers 
must provide the following information:
    (1) Crop by type or variety, as applicable;
    (2) The cause of the crop damage;
    (3) Date the loss occurred, as applicable;
    (4) Date the damage or loss became apparent;
    (5) The existence of a guaranteed payment through a contract or 
agreement for planted acreage as opposed to delivery of production, if 
one exists;
    (6) Type of crop loss occurred, e.g. prevented planting or low 
yield;
    (7) Practices employed to grow the crop, e.g. irrigated or non-
irrigated;
    (8) For prevented planting:
    (i) Total acreage intended to be planted to the crop in the 
administrative county;
    (ii) Total acreage planted by the producer to the crop in the 
administrative county;
    (iii) Whether a purchase, delivery, or arrangement for purchase or 
delivery was made for seed, chemicals, fertilizer, etc; and
    (iv) What and when land preparation measures, e.g. cultivation, 
etc. were completed and indicate what has been done or will be done 
with the acreage, e.g. abandoned, replanted, etc.
    (9) For low yield:
    (i) Total acreage planted by the producer to the crop in the 
administrative county;
    (ii) Total acreage of the crop in the administrative county 
affected;
    (iii) What and when land preparation measures and practices, e.g. 
cultivation, planting, irrigated, etc. were completed before and after 
the loss; and
    (iv) What will be done with the affected crop acreage, e.g. 
harvested, destroyed and replanted to a different crop, abandoned, etc.
    (10) Any such other information requested by CCC to establish the 
loss.
    (c) A notice of loss provided beyond the time specified in 
paragraph (a) of this section may be considered timely filed if, at the 
discretion of CCC, provided at such time to permit an authorized CCC 
representative the opportunity to:
    (1) Verify the information on the notice of loss by inspection of 
the specific acreage or crop involved; and
    (2) Determine, based on information obtained by inspection of the 
specific acreage or crop involved, that an eligible cause of loss, as 
opposed to other circumstance, caused the claimed damage or loss.
    (d) Crop acreage that will not be harvested, i.e. acreage that is 
to be abandoned or destroyed or in the case of forage acreage intended 
to be mechanically harvested but grazed, must be left intact and 
producers must request, in the administrative FSA office for the 
acreage, a crop appraisal and release of crop acreage by a FCIC- or 
CCC-approved loss adjustor:
    (1) Prior to destruction or abandonment of the crop acreage; or
    (2) No later than the normal harvest date, as determined by CCC.
    (e) Producers must apply for payments prior to the earlier of the:
    (1) Date an application for coverage is filed for the crop for the 
subsequent crop year; or
    (2) Application closing date for the crop for the subsequent crop 
year.

[[Page 12452]]

Sec. 1437.11  Average market price and payment factors.

    (a) An average market price will be used to calculate assistance 
under this part and will be:
    (1) A dollar value per the applicable unit of measure of the 
eligible crop;
    (2) Determined on a harvested basis without the inclusion of 
transportation, storage, processing, marketing, or other post-harvest 
expenses, as determined by CCC;
    (3) Comparable with established FCIC prices; and
    (4) Determined, as practicable, for each intended use of a crop 
within a State for a crop year.
    (b) For these purposes, where needed, an Animal-unit-days (AUD) 
value will be based on the national average price of corn and the daily 
requirement of 13.6 megacalories of net energy for maintenance of 1 
animal unit.
    (c) Payment factors will be used to calculate assistance for crops 
produced with significant and variable harvesting expenses that are not 
incurred because the crop acreage was prevented planted or planted but 
not harvested, as determined by CCC.
    (d) An adjusted market price will be calculated based on the 
provisions in this section and others as may apply. A final payment 
price will be determined by multiplying, as appropriate, the average 
market price by the applicable payment factor (i.e. harvested, 
unharvested, or prevented planting) by 55 percent or, by multiplying 
the applicable AUD (as adjusted, if adjusted) by 55 percent.


Sec. 1437.12  Crop definition.

    (a) For the purpose of providing benefits under this part, CCC 
will, at its discretion, define crops as specified in this section.
    (b) CCC may separate or combine types and varieties as a crop when 
specific credible information as determined by CCC is provided showing 
the crop of a specific type or variety has a significantly different or 
similar value when compared to other types or varieties, as determined 
by CCC.
    (c) CCC may recognize two or more different crops planted on the 
same acreage intended for harvest during the same crop year as two or 
more separate crops. The crop acreage may include a crop intended for 
harvest before planting of a succeeding crop or a succeeding crop 
interseeded with the preceding crop prior to intended harvest of the 
preceding crop. The acreage must be in an area where the practice is 
recognized as a good farming practice, as determined by CCC, and all 
crops are recognized by CCC as able to achieve the expected yield, as 
determined by CCC.
    (d) CCC may consider crop acreage that is harvested more than once 
during the same crop year from the same plant as a single crop. The 
acreage must be in an area where the practice is recognized as a good 
farming practice, as determined by CCC.
    (e) CCC may consider each planting period of multiple planted 
acreage as a separate crop. The acreage must be in an area where the 
practice is recognized as a good farming practice, as determined by 
CCC.
    (f) CCC may define forage as separate crops according to the 
intended method of harvest, either mechanical harvest or grazed.
    (g) Forage acreage intended to be grazed may be further defined as 
warm and cool season forage crops.
    (h) Forage acreage intended to be mechanically harvested may be 
defined as a separate crop from grazed forage and may be separated 
based upon the commodity used as forage, to the extent such separation 
is allowed under paragraph (b) of this section.
    (i) Crop acreage intended for the production of seed may be 
considered a separate crop from other intended uses, as determined by 
CCC, if all the following criteria apply:
    (1) The specific crop acreage is seeded, or intended to be seeded, 
with an intent of producing commercial seed as its primary intended 
use;
    (2) There is no possibility of other commercial uses of production 
from the same crop without regard to market conditions; and
    (3) The growing period of the specific crop acreage is uniquely 
conducive to the production of commercial seed and not conducive to the 
production of any other intended use of the crop, (e.g. vernalization 
in a biennial crop such as carrots and onions) and that accommodation 
renders the possibility of production for any other intended use of the 
crop improbable.


Sec. 1437.13  Multiple benefits.

    (a) If a producer is eligible to receive payments under this part 
and benefits under any other program administered by the Secretary for 
the same crop loss, the producer must choose whether to receive the 
other program benefits or payments under this part, but shall not be 
eligible for both. The limitation on multiple benefits prohibits a 
producer from being compensated more than once for the same loss.
    (b) The limitation on multiple benefits in paragraph (a) of this 
section shall not apply in any respect to Emergency Loans under 
subtitle C of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1961 et seq).
    (c) The restriction on multiple benefits does not relieve the 
producer from the requirements of making a production and acreage 
report.
    (d) If the other USDA program benefits are not available until 
after an application for benefits has been filed under this part, the 
producer may, to avoid this restriction on such other benefits, refund 
the total amount of the payment to the administrative FSA office from 
which the payment was received.


Sec. 1437.14  Payment and income limitations.

    (a) NAP payments shall not be made in excess of $100,000 per person 
per crop year under this part.
    (b) NAP payments shall not be made to a person who has qualifying 
gross revenues in excess of $2 million for the most recent tax year 
preceding the year for which assistance is requested. Qualifying gross 
revenue means:
    (1) With respect to a person who receives more than 50 percent of 
such person's gross income from farming, ranching, and forestry 
operations, the annual gross income for the taxable year from such 
operations; and
    (2) With respect to a person who receives 50 percent or less of 
such person's gross income from farming, ranching, and forestry 
operations, the person's total gross income for the taxable year from 
all sources.
    (c) CCC will pay, for up to one year, simple interest on payments 
to producers which are delayed. Interest will be paid on the net amount 
ultimately found to be due, and will begin accruing on the 31st day 
after the date the producer signs, dates, and submits a properly 
completed application for payment on the designated form, or the 31st 
day after a disputed application is adjudicated. Interest will be paid 
unless the reason for failure to timely pay is due to the producer's 
failure to provide information or other material necessary for the 
computation of payment, or there was a genuine dispute concerning 
eligibility for payment.
    (d) Rules set out in 7 CFR part 1400 shall apply in implementing 
the restrictions of this section.


Sec. 1437.15  Miscellaneous provisions.

    (a) To be eligible for benefits under this part, producers must be 
in compliance with the highly erodible land and wetlands provisions of 
part 12 of this title.
    (b) The provisions of Sec. 718.11 of this title, providing for 
ineligibility for

[[Page 12453]]

benefits for offenses involving controlled substances, shall apply.
    (c) A person shall be ineligible to receive assistance under this 
part for the crop year plus two subsequent crop years if it is 
determined by the State or county committee or an official of FSA that 
such person has:
    (1) Adopted any scheme or other device that tends to defeat the 
purpose of a program operated under this part;
    (2) Made any fraudulent representation with respect to such 
program; or
    (3) Misrepresented any fact affecting a program determination.
    (d) All amounts paid by CCC to any such producer, applicable to the 
crop year in which a violation of this part occurs, must be refunded to 
CCC together with interest and other amounts as determined appropriate 
to the circumstances by CCC.
    (e) All persons with a financial interest in the operation 
receiving benefits under this part shall be jointly and severally 
liable for any refund, including related charges, which is determined 
to be due CCC for any reason under this part.
    (f) In the event that any request for assistance or payments under 
this part was established as result of erroneous information or a 
miscalculation, the assistance or payment shall be recalculated and any 
excess refunded with applicable interest.
    (g) The liability of any person for any penalty under this part or 
for any refund to CCC or related charge arising in connection therewith 
shall be in addition to any other liability of such person under any 
civil or criminal fraud statute or any other provision of law 
including, but not limited to: 18 U.S.C. 286, 287, 371, 641, 651, 1001 
and 1014; 15 U.S.C. 714m; and 31 U. S. C. 3729.
    (h) The appeal regulations at parts 11 and 780 of this title apply 
to decisions made according to this part.
    (i) Any payment or portion thereof to any person shall be made 
without regard to questions of title under State law and without regard 
to any claim or lien against the crop, or proceeds thereof.
    (j) For the purposes of 28 U.S.C. 3201(e), the Secretary hereby 
waives the restriction on receipt of funds or benefits under this 
program but only as to beneficiaries who as a condition of such waiver 
agree to apply the benefits to reduce the amount of the judgement lien.
    (k) The provisions of parts 1400, 1403 and 1404 of this chapter 
apply to NAP.
    (l) In the case of death, incompetence or disappearance of any 
person who is eligible to receive payments under this part, such 
payments will be disbursed in accordance with part 707 of this title.

Subpart B--Determining Yield Coverage Using Actual Production 
History


Sec. 1437.101  Actual production history.

    Actual production history will be used, except as otherwise 
indicated in this part, as the basis for providing noninsured crop 
disaster assistance.


Sec. 1437.102  Yield determinations.

    (a) Payments based on yields shall be made on ``approved yields'', 
which shall be calculated based on the producer's APH for that period 
up to ten years for which, of the first time such a yield is 
calculated, there are consecutive years, beginning with the most recent 
completed year, of actual production history for the producer. If there 
are not four such consecutive years of history (excluding years when 
the crop was out of rotation), then such first ``approved yield'' shall 
be constructed by creating a four year history as provided for in this 
part. After the first such approved yield is constructed, years will be 
added to that history in the manner provided for in this section, 
dropping, as needed, previous years from the history to the extent that 
the current history would be a history or base of ten years. For the 
first approved yield, as needed to construct a four-year history, 
history will be supplied using T-yields, as set out in paragraph (b) of 
this section.
    (b) The county expected yield:
    (1) Is the ``T-yield'' for the crop, and is the Olympic average 
(disregarding the high and low yields) of yields in the county the 5 
consecutive crop years immediately preceding the previous crop year. 
(Example: For the 2001 crop year, the base period would be 1995 through 
1999).
    (2) Will be the same as the FCIC transitional yield if crop 
insurance is available for the crop, (but not necessarily for the cause 
of loss if excluded by policy provisions), in the administrative 
county.
    (3) Will be calculated so as to be comparable to the FCIC 
transitional yield most reasonable to the area if crop insurance was 
available for the crop (but not necessarily for the cause of loss) in 
contiguous counties, but not in the immediate county.
    (c) Available historical information will be used to establish the 
county expected yields. Historical information is available from 
sources including, but is not limited to, National Agricultural 
Statistics Service data, Cooperative State Research, Education, and 
Extension Service records, Federal Crop Insurance Data, credible non-
government studies, yields in similar areas, and reported actual yield 
data. Such yields will be based on the acreage intended for harvest.
    (d) County expected yields may be adjusted for:
    (1) Yield variations due to different farming practices in the 
administrative county such as: irrigated, nonirrigated, and organic 
practices; and
    (2) Cultural practices, including the age of the planting when such 
practices are different from those used on acreage to establish the 
yield.
    (e) A T-yield will be used in the actual production history 
database when less than four consecutive crop years of actual, 
assigned, or zero yields, as applicable, are available. For those 
producers who have land physically located in multiple counties and 
administered out of one county office, the T-yield for all land for the 
producer will be based on the administrative county's expected yield 
for that crop. Where a four-year base must be constructed for the 
producer's first approved yield because the producer does not have at 
least four consecutive years of actual history starting with the most 
recent year, then:
    (1) If an approved yield had not previously been calculated for the 
crop and there are no production records available for the most recent 
crop year, or if there is no formula provided for the producer under 
paragraphs (e)(2) through (4) of this section, then the approved yield 
for the current crop year will be calculated on the simple average of 
65 percent of the applicable T-yield for each of the four years of the 
constructed base;
    (2) If certified acceptable production records are available for 
only the most recent crop year and there are no zero (credited) or 
assigned yields in the producer's history, the approved yield for the 
current crop year will be calculated on the simple average of the one 
actual yield plus 80 percent of the applicable T-Yield for the missing 
crop years.
    (3) If certified acceptable production records are available for 
only the two most recent crop years and there are no zero (credited) or 
assigned yields in the APH database, the approved yield for the current 
crop year will be calculated on the simple average of the two actual 
yields plus 90 percent of the applicable T-yield for the missing years.
    (4) If certified acceptable production records are available for 
only the three most recent crop years and there are no zero (credited) 
or assigned yields in the APH database, the approved yield will be 
calculated on the simple average of

[[Page 12454]]

the three actual yields plus 100 percent of the applicable T-Yield for 
the missing year.
    (f) CCC will reduce unadjusted T-yields placed in the actual 
production history database when, as determined by CCC, an unadjusted 
T-yield does not accurately reflect the productive capability of 
specific crop acreage.
    (g) An actual yield includes the total amount of harvested and 
appraised production on a per acre, or other basis, as applicable.
    (h) Once an approved yield has been calculated for any year, then 
thereafter an assigned yield will be used to update or extend the 
producer's actual production history (or base) database when producers 
fail to certify a report of production after the approved yield was 
calculated and the following standards shall apply:
    (1) The assigned one-year yield will be equal to 75 percent of the 
approved yield calculated for the most recent crop year for which 
producers do not certify a report of production.
    (2) Producers may have only one assigned yield in the actual 
production history database.
    (3) Producers may replace an assigned yield with an actual yield by 
providing a certification of production and production records for the 
applicable crop year in accordance with Sec. 1437.7.
    (4) If the acreage of a crop in the administrative county in which 
the unit is located for the crop year increases by more than 100 
percent over any year in the preceding seven crop years, or 
significantly from the previous crop years, as determined by CCC, 
producers may not receive an assigned yield and will receive a zero 
credited yield, unless producers provide:
    (i) Detailed documentation of production costs, acres planted, and 
yield for the crop year for which the producer is requesting 
assistance, or
    (ii) If CCC determines those records are inadequate, proof that the 
eligible crop, had it been harvested, could have been marketed at a 
reasonable price.
    (5) Notwithstanding paragraph (h)(4) of this section an assigned 
yield may be used if:
    (i) The planted acreage for the crop has been inspected by a third 
party acceptable to CCC, or
    (ii) The FSA county executive director, with the concurrence of the 
FSA state executive director, makes a recommendation for an exemption 
from the requirements and such recommendation is approved by CCC.
    (6) A zero credited yield will be used to the extent provided for 
in paragraph (i) of this section.
    (i) A zero credited yield will be placed in the actual production 
history database for each crop year, following the crop year containing 
an assigned yield, for which producers do not certify a report of 
production. A zero credited yield may be replaced with an actual yield 
by providing a certification of production and production records for 
the applicable crop year in accordance with Sec. 1437.7.
    (j) An approved yield is calculated as the simple average of a 
minimum of four, not to exceed a maximum of 10 consecutive crop year 
yields for the crops, or as determined by CCC and as provided in this 
section.
    (1) If, for one or more actual production history crop years used 
to establish the approved yield, the actual or appraised yield is less 
than 65 percent of the current crop year T-yield due to losses incurred 
in a disaster year, as determined by CCC, producers may request CCC 
replace the applicable yield with a yield equal to 65 percent of the 
current crop year T-yield.
    (2) If approved yields were calculated for any of the 1995 through 
2000 crop years, and subsequently in that period production was not 
certified, producers may request CCC replace the missing yields for 
such years with yields equal to the higher of 65 percent of the current 
crop year T-yield or the missing crop years actual yield.
    (3) If producers add land in the farming operation and do not have 
available production records for the added land CCC will calculate an 
approved yield for the new unit by utilizing the actual production 
history yields for the existing unit. In the event the crop suffers a 
loss greater than 50 percent of the initial approved yield for the crop 
year and unit acreage has increased by more than 75 percent of the 
historical average acreage, CCC may adjust the approved yield, as 
determined by CCC.
    (k) If a producer is a new producer, the approved yield may be 
based on unadjusted T-Yields or a combination of actual yields and 
unadjusted T-Yields. A new producer is a person who has not been 
actively engaged in farming for a share of the production of the 
eligible crop in the administrative county for more than two APH crop 
years. Formation or dissolution of an entity which includes individuals 
with more than two APH crop years of production history during the base 
period does not qualify the new entity as a new producer for APH 
determination purposes.
    (l) If producers qualify as a new producer and have produced the 
crop for 1 or 2 crop years, producers must provide to CCC at the 
administrative FSA office serving the area in which the crop is 
located, a certification and records of production for those crop 
years.
    (m) Further adjustments may be made as necessary to accomplish the 
purposes of this program.


Sec. 1437.103  Determining payments for low yield.

    (a) Except to the extent that the loss calculation provisions of 
other subparts apply, and subject to limitations set out elsewhere in 
this part and in this title and to the availability of funds, payments 
under this part shall be made on eligible crops with eligible losses 
by:
    (1) Multiplying the total eligible acreage planted to the eligible 
crop by the producers share, and subject to provisions for specific 
crops provided elsewhere in this part;
    (2) Multiplying the product of paragraph (a)(1) of this section by 
50 percent of the approved yield per acre for the commodity for the 
producer.
    (3) Subtracting net production of the total eligible acreage from 
the product of paragraph (a)(2) of this section;
    (4) Multiplying the difference calculated under paragraph (a)(3) of 
this section by the final payment price calculated under Sec. 1437.11, 
and then
    (5) Subtracting the value of salvage and secondary use.
    (b) Further adjustments may be made as needed to accomplish the 
purposes and goals of the program.


Sec. 1437.104  Honey.

    (a) Honey production eligible for benefits under this part includes 
table and non-table honey produced commercially.
    (b) All of a producer's honey will be considered a single crop, 
regardless of type or variety of floral source or intended use.
    (c) The crop year for honey production is the calendar year, 
January 1 through December 31.
    (d) In addition to filing a report of acreage in accordance with 
Sec. 1437.7, honey producers must provide a record of colonies to CCC. 
The report of colonies must be filed before the crop year for which 
producers seek to maintain coverage. The report of colonies shall 
include:
    (1) The address of the producer's headquarters and FSA farm serial 
number, if available;
    (2) Names and shares of each person sharing in the honey produced 
from the unit;
    (3) The number of all colonies of bees belonging to the unit;

[[Page 12455]]

    (4) The names of counties in which colonies of bees are located as 
of the date of the report; and
    (5) A certification of the number of colonies reported including 
all colonies from which production is expected.
    (e) The honey unit shall consist of all the producer's bee 
colonies, regardless of location.
    (f) Producers must designate a FSA office as the control office for 
the honey operation. Producers must complete the following actions only 
in the control office:
    (1) File an application for coverage;
    (2) File a report of colonies;
    (3) Report total unit production; and
    (4) Request to change a unit's control office.
    (g) Actions that may be taken in any Administrative FSA office 
includes:
    (1) Designating or selecting another control office; or
    (2) Filing a notice of loss in accordance with Sec. 1437.10.
    (h) Producers must notify the control office designated in 
accordance with paragraph (f) of this section within 30 calendar days 
of the date of:
    (1) Any changes in the total number of colonies; and
    (2) The movement of any colonies into any additional counties.
    (i) Payments will be based on the amount of losses for this 
community in excess of a 50 percent loss level at a rate determined in 
accord with this part and the authorizing legislation.


Sec. 1437.105  Maple sap.

    (a) NAP assistance for maple sap is limited to maple sap produced 
on private property for sale as sap or syrup. Eligible maple sap must 
be produced from trees that:
    (1) Are located on land the producer controls by ownership or 
lease;
    (2) Are managed for production of maple sap;
    (3) Are at least 30 years old and 12 inches in diameter; and
    (4) Have a maximum of 4 taps per tree according to the tree's 
diameter.
    (b) The crop year for maple sap production is the calendar year, 
January 1 through December 31.
    (c) If producers file an application for coverage in accordance 
with Sec. 1437.6, tree acreage containing trees from which maple sap is 
produced or is to be produced must be reported to CCC no later than the 
beginning of the crop year.
    (d) In addition to the applicable records required under 
Sec. 1437.7, producers must report the:
    (1) Total number of eligible trees on the unit;
    (2) Average size and age of producing trees; and
    (3) Total number of taps placed or anticipated for the tapping 
season.
    (e) A maximum county-expected-yield for maple sap shall be 10 
gallons of sap per tap per crop year unless acceptable documentary 
evidence, as determined by CCC, is available to CCC to support a higher 
county-expected-yield.
    (f) The average market price for maple sap must be established for 
the value of the sap before processing into syrup. If price data is 
available only for maple syrup, this data must be converted to a maple 
sap basis. The wholesale price for a gallon of maple syrup shall be 
multiplied by 0.00936 to arrive at the average market price of a gallon 
of maple sap.
    (g) The actual production history for maple sap shall be recorded 
on the basis of gallons of sap per tap.
    (h) The unit's expected production is determined by:
    (1) Multiplying the number of taps placed in eligible trees; by
    (2) The approved per tap yield as determined in accordance with 
Sec. 1437.102.
    (i) Payments will be based on the amount of losses for this 
community in excess of a 50 percent loss level at a rate determined in 
accord with this part and the authorizing legislation.


Secs. 1437.106-1437.200  [Reserved]

Subpart C--Determining Coverage for Prevented Planted Acreage


Sec. 1437.201  Prevented planting acreage.

    (a) Prevented planting is the inability to plant an eligible crop 
with proper equipment during the planting period as a result of an 
eligible cause of loss, as determined by CCC.
    (b) The eligible cause of loss that prevented planting must have:
    (1) Occurred after a previous planting period for the crop and
    (2) Before the final planting date for the crop in the applicable 
crop year or in the case of multiple plantings, the harvest date of the 
first planting in the applicable planting period, and
    (3) Generally affected other producers in the area, as determined 
by CCC.
    (c) Producers must be prevented from planting more than 35 percent 
of the total eligible acreage intended for planting to the eligible 
crop and in the case of multiple planting, more than 35 percent of the 
total eligible acres intended to be planted within the applicable 
planting period.
    (d) Eligible prevented planting acreage will be determined on the 
basis of the producer's intent to plant the crop acreage, and 
possession of, or access to, resources to plant, grow, and harvest the 
crop, as applicable.
    (e) Acreage ineligible for prevented planting coverage includes, 
but is not limited to:
    (1) Acreage which planting history or conservation plans indicate 
would remain fallow for crop rotation purposes; and
    (2) Acreage used for conservation purposes or intended to be or 
considered to have been left unplanted under any program administered 
by USDA, including the Conservation Reserve and Wetland Reserve 
Programs.


Sec. 1437.202  Determining payments for prevented planting.

    (a) Subject to limitations, availability of funds, and specific 
provisions dealing with specific crops, a payment for prevented 
planting will be determined by:
    (1) Multiplying the producer's total eligible acreage intended for 
planting to the eligible crop by the producer's share;
    (2) Multiplying the product of paragraph (a)(1) of this section by 
65 percent;
    (3) Subtracting the total acres planted from the product of 
paragraph (a)(2) of this section;
    (4) Multiplying the product of paragraph (a)(3) of this section by 
50 percent of the producer's approved yield;
    (5) Multiplying the product of paragraph (a)(4) of this section by 
the final payment price for the producer's crop as calculated by the 
agency under Sec. 1437.11.
    (b) Yields for purposes of paragraph (a) of this section shall be 
calculated in the same manner as for low-yield claims.


Secs. 1437.203-1437.300  [Reserved]

Subpart D--Determining Coverage Using Value


Sec. 1437.301  Value loss.

    (a) Special provisions are required to assess losses and calculate 
assistance for a few crops and commodities which do not lend themselves 
to yield loss situations. Assistance for these commodities is 
calculated based on the loss of value at the time of disaster. The 
agency shall determine which crops shall be treated as value-loss 
crops, but unless otherwise announced, such crops shall be limited to 
those identified in Secs. 1437.303 through 1437.309 as value loss 
crops. Lost productions of value loss crops shall be compensable only 
under this subpart.

[[Page 12456]]

    (b) The crop year for all value loss crops is October 1 through 
September 30.
    (c) Producers must file an application for coverage in accordance 
with Sec. 1437.6, and must:
    (1) Provide a report of the crop, commodity, and facility to CCC 
for the acreage or facility, in a form prescribed by CCC, no later than 
the beginning of the crop year.
    (2) Maintain a verifiable inventory of the eligible crop throughout 
the crop year; and
    (3) Provide an accurate accounting of the inventory, as required by 
CCC.


Sec. 1437.302  Determining payments.

    Subject to all restrictions and the availability of funds, value 
loss payments for qualifying losses will be determined by:
    (a) Multiplying the field market value of the crop before the 
disaster by 50 percent;
    (b) Subtracting the sum of the field market value after the 
disaster and value of ineligible causes of loss from the result from 
paragraph (a)(1) of this section;
    (c) Multiplying the result from paragraph (a)(2) of this section by 
the producer's share;
    (d) Multiplying the result from paragraph (a)(3) of this section by 
55 percent plus whatever factor deemed appropriate to reflect savings 
from non-harvesting of the damaged crop or other factors as 
appropriate;
    (e) Multiplying the salvage value by the producer's share;
    (f) Subtracting the result from paragraph (a)(5) of this section 
from the result from paragraph (a)(4) of this section.


Sec. 1437.303  Aquaculture, including ornamental fish.

    (a) Aquaculture is a value loss crop and is compensable only in 
accord with restrictions set in this section. Eligible aquacultural 
species shall only include:
    (1) Any species of aquatic organisms grown as food for human 
consumption as determined by CCC.
    (2) Fish raised as feed for other fish that are consumed by humans; 
and
    (3) Ornamental fish propagated and reared in an aquatic medium.
    (b) The aquacultural facility must be:
    (1) A commercial enterprise on private property;
    (2) Owned or leased by the producer, with readily identifiable 
boundaries; and
    (3) Managed and maintained using good aquacultural growing 
practices.
    (c) Producers must:
    (1) Ensure adequate and proper flood prevention, growing medium, 
fertilization or feeding, irrigation and water quality, predator 
control, and disease control; and
    (2) Have control of the waterbed.
    (d) Eligible aquacultural species must be:
    (1) Placed in the facility and not be indigenous to the facility; 
and
    (2) Kept in a controlled environment; and
    (3) Planted or seeded in containers, wire baskets, net pens, or 
similar device designed for the protection and containment of the 
seeded aquacultural species.
    (e) In the crop year in which a notice of loss is filed, producers 
may be required, at the discretion of CCC, to provide evidence that the 
aquacultural species are produced in a facility in accordance with 
paragraphs (b), (c) and (d) of this section.


Sec. 1437.304  Floriculture.

    (a) Floriculture, except for seed crops as specified in paragraph 
(d) of this section, is a value loss crop and is compensable only in 
accord with restrictions set in this section. Eligible floriculture 
shall be limited to commercial production of:
    (1) Field-grown flowers, including flowers grown in containers or 
other growing medium maintained in a field setting according to 
industry standards, as determined by CCC; and
    (2) Tubers and bulbs, for use as propagation stock of eligible 
floriculture plants; and
    (3) Seed for propagation of eligible floriculture plants.
    (b) Floriculture does not include flowering plants indigenous to 
the location of the floriculture facility or acreage.
    (c) Eligible floriculture must be grown in a region or controlled 
environment conducive to the successful production of flowers, tubers, 
and bulbs, as determined by CCC.
    (d) Claims on losses on the production of flower seed for 
propagation of eligible floriculture plants will not be treated under 
``value loss'' rules, but under the rules for normal production low 
yield crops under subpart B of this part.
    (e) The facility or acreage for eligible floriculture must be 
managed and maintained using good floriculture growing practices. At a 
minimum, producers are responsible for providing a controlled 
environment and must ensure adequate and proper fertilization, 
irrigation, weed control, insect and disease control, and rodent and 
wildlife control.
    (f) In the crop year in which a notice of loss is filed, producers 
may be required, at the discretion of CCC, to provide evidence the 
floriculture is produced in accordance with paragraph (e) of this 
section.
    (g) Flowers having any dollar value shall be counted as having full 
value for loss calculations. Damaged plants that are determined able to 
rejuvenate or determined to be merely stunted shall be counted as worth 
full value.


Sec. 1437.305  Ornamental nursery.

    (a) Eligible ornamental nursery stock is a value loss crop and is 
compensable only in accord with restrictions set out in this section. 
Eligible ornamental nursery stock is limited to field-grown and 
containerized decorative plants grown in a controlled environment for 
commercial sale.
    (b) The property upon which the nursery stock is located must be 
owned or leased by the producer.
    (c) The eligible nursery stock must be placed in the ornamental 
nursery facility and not be indigenous to the facility.
    (d) The facility must be managed and cared for using good nursery 
growing practices for the geographical region. At a minimum producers 
must provide a controlled environment and ensure adequate and proper 
flood prevention, growing medium, fertilization, irrigation, insect and 
disease control, weed control, rodent and wildlife control, and over-
winterization storage facilities.
    (e) An ornamental plant having any value as an ornamental plant, or 
a damaged ornamental plant that may rejuvenate and re-establish value 
as a ornamental plant, shall be considered as worth full value based on 
the age or size of the plant at the time of disaster.
    (f) In the crop year in which a notice of loss is filed, producers 
may be required, at the discretion of CCC, to provide evidence the 
ornamental nursery is maintained in accordance with this section.


Sec. 1437.306  Christmas tree crops.

    (a) A Christmas tree is a value loss crop and may generate a claim 
for benefits under this part only if the tree was grown exclusively for 
commercial use as a Christmas tree, and only if other requirements of 
this section are met.
    (b) The unit of measure for all Christmas tree crops is a plant.
    (c) A Christmas tree having any value as a Christmas tree, or a 
damaged Christmas tree that may rejuvenate and re-establish value as a 
Christmas tree, shall be considered as worth full value based on the 
age of the tree at the time of disaster.

[[Page 12457]]

Sec. 1437.307  Mushrooms.

    (a) Eligible mushrooms is a value loss crop and is only compensable 
in accord with the restrictions of this section. To be eligible, the 
mushrooms must be grown as a commercial crop in a facility with a 
controlled environment utilizing good mushroom growing practices. The 
facility must be located on private property either owned or leased by 
the producer.
    (b) The controlled environment for eligible mushrooms must include 
primary and backup systems for:
    (1) Temperature and humidity controls;
    (2) Proper and adequate lighting; and
    (3) Positive air pressurization and filtration.
    (c) The growing medium must consist of a substrate (a habitat and 
nutrient base) sterilized by heat treatment.
    (d) Good mushroom growing practices must be used, and they consist 
of proper and adequate insect and disease control and the maintenance 
of a sterile environment. Maintaining a sterile environment includes at 
a minimum:
    (1) Adequate hygiene;
    (2) Overall cleanliness;
    (3) Isolation or minimum contact procedures;
    (4) Use of footpaths; and
    (5) Availability and frequent utilization of wash-down facilities.
    (e) In the crop year in which a notice of loss is filed, producers 
may be required, at the discretion of CCC, to provide evidence the 
mushrooms are maintained in accordance with this section.


Sec. 1437.308  Ginseng.

    (a) Ginseng is a value loss crop and is compensable only as allowed 
in this section. Ginseng is eligible only if:
    (1) The ginseng includes stratified seeds for use as propagation 
stock in a commercial ginseng operation or rootlet for commercial sale 
that are grown in a controlled, cultivatable environment on private 
property either owned or leased by the producer; and
    (2) The ginseng is grown using good ginseng growing practices with 
all plant needs supplied and under control of the producer;
    (b) Ginseng will not be eligible to generate benefits under this 
part if it:
    (1) Is indigenous to the facility;
    (2) Is grown solely for medicinal purposes; and
    (3) Includes wild ginseng rootlet that is harvested and 
transplanted from woodland grown ginseng.
    (c) Good ginseng growing practices must be followed, and include, 
but are not limited to:
    (1) Adequate drainage;
    (2) Proper and adequate shade;
    (3) Accurate pH level;
    (4) Adequate and timely fertilization, including an adequate supply 
to ensure nutrient reserves to the ginseng plants and customary 
application equipment;
    (5) Adequate pest control, including but not limited to, weed, 
rodent, and wildlife control; and
    (6) Disease control.
    (d) Ginseng producers must:
    (1) Provide a report of inventory of all ginseng, as determined by 
CCC;
    (2) Provide production and sales records necessary to determine the 
value of eligible ginseng;
    (3) Allow a CCC-certified loss adjustor to verify loss, including 
physically removing representative samples;
    (4) Maintain and provide, as determined by CCC, adequate records of 
fertilization, and pest and disease controls used or put into place 
during the crop year; and
    (5) Possess a valid food processing licence issued by the 
applicable State Department of Agriculture or equivalent and subject to 
food regulations administered by the Food and Drug Administration.
    (e) In the crop year in which a notice of loss is filed, producers 
may be required, at the discretion of CCC, to provide evidence the 
ginseng was produced in accordance with this section.


Sec. 1437.309  Turfgrass sod.

    (a) Turfgrass sod is a value loss crop and is the upper stratum of 
soil bound by mature grass and plant roots into a thick mat produced in 
commercial quantities for sale.
    (b) Specific species, types or varieties of grass intended for 
turfgrass sod will be considered a separate crop without regard to 
other intended uses.
    (c) The unit of measure for all turfgrass sod shall be a square 
yard.
    (d) Turfgrass sod having any value shall be considered as worth 
full value.
    (e) In addition to the records required in Sec. 1437.7, producers 
seeking payment must provide information to CCC regarding the average 
number of square yards per acre and all unharvested areas.


Secs. 1437.310-1437.400  [Reserved]

Subpart E--Determining Coverage of Forage Intended for Animal 
Consumption


Sec. 1437.401  Forage.

    (a) Forage eligible to generate benefits under this part is limited 
to vegetation produced for animal consumption in a commercial operation 
using acceptable farming, pasture and range management practices for 
the location necessary to sustain sufficient quality and quantity of 
the vegetation so as to be suitable for grazing livestock or mechanical 
harvest. Forage to be mechanically harvested shall be treated under the 
rules for low-yield crops as calculated under Sec. 1437.103. Claims on 
forage for grazing benefits will, contrariwise, be determined under 
this subpart. However, the provisions in this subpart shall govern for 
all claims including forage for mechanical harvest.
    (b) Producers of forage must, in addition to the records required 
in Sec. 1437.7, specify the intended method of harvest of all acreage 
intended as forage for livestock consumption as either mechanically or 
grazed.
    (c) Producers must, in the administrative FSA office for the unit, 
request an appraisal prior to the onset of grazing of any intended 
mechanically harvested forage acreage that will be both mechanically 
harvested and grazed.
    (d) Forage acreage reported to FSA as intended to be mechanically 
harvested which is subsequently completely grazed will be considered 
for crop definition purposes as mechanically harvested. Expected 
production of the specific acreage will be calculated on the basis of 
carrying capacity.
    (e) Small grain forage is the specific acreage of wheat, barley, 
oats, triticale, or rye intended for use as forage. Small grain forage 
shall be considered separate crops and distinct from any other forage 
commodities and other intended uses of the small grain commodity. In 
addition to the records required in Sec. 1437.7 producers must specify 
whether the intended forage crop is intended for fall/winter, spring, 
or total season forage. In addition to other eligibility requirements, 
CCC will consider other factors, such as, water sources and available 
fencing, and adequate fertilization to determine small grain forage 
eligibility, yields, and production.
    (f) CCC will establish forage losses of acreage intended to be 
grazed on the basis of:
    (1) For improved pasture, as determined by CCC, a similar 
percentage of loss of mechanically harvested forage acreage on the 
farm, or similar farms in the area; or
    (2) For native pasture, as determined by CCC, the percentage of 
loss as determined by two independent assessments of pasture 
conditions.


Sec. 1437.402  Carrying capacity.

    (a) CCC will establish a carrying capacity for all grazed forage 
present in the county for purposes of

[[Page 12458]]

administering this program and to that end:
    (1) Multiple carrying capacities may be determined for a specific 
vegetation if factors, such as soil type, elevation, and topography, 
result in a significant difference of carrying capacity within the 
county.
    (2) CCC may establish separate carrying capacities for irrigated 
and non-irrigated forage acreage when acreage of traditionally 
irrigated forage (forage actually irrigated 3 of the last 5 crop years) 
is present in the county.
    (b) Producers may provide evidence that unit forage management and 
maintenance practices are improvements over those practices generally 
associated with the established carrying capacity. Based on this 
evidence, CCC may adjust the expected AUD for the specific forage 
acreage upward for the crop year NAP assistance is requested by:
    (1) Three percent when at least 1 practice was completed at least 1 
time in the previous 5 crop years and such practice can be expected to 
have a positive impact on the forage's carrying capacity in the crop 
year NAP assistance is requested;
    (2) Five percent when 2 or more practices were completed at least 1 
time in the previous 5 crop years and such practices can be expected to 
have a positive impact on the forage's carrying capacity in the crop 
year NAP assistance is requested; and
    (3) Greater than 5 percent when producers provide acceptable 
records, as determined by CCC, of higher forage production or an 
increase in animal units supported on the specific forage acreage in 3 
of the 5 crop years immediately before the crop year NAP assistance is 
requested.


Sec. 1437.403  Determining payments.

    Subject to payment limits, availability of funds, and other limits 
as may apply, payments for losses of forage reported to FSA as intended 
to be grazed will be determined by:
    (a) Multiplying the eligible acreage by the producer's share;
    (b) Dividing the result from paragraph (a) of this section by the 
carrying capacity or adjusted per day carrying capacity established for 
the specific acreage, as determined by CCC;
    (c) Multiplying the result from paragraph (b) of this section by 
the number of days established as the grazing period;
    (d) Adding adjustments of AUD for practices and production to the 
product of paragraph (c) of this section;
    (e) Multiplying the result from paragraph (d) of this section by 
the applicable percentage of loss established by CCC;
    (f) Multiplying the amount of AUD lost to other causes, as 
determined by CCC, by the producer's share;
    (g) Subtracting the result from paragraph (f) of this section from 
the result from paragraph (e) of this section;
    (h) Multiplying the result from paragraph (d) of this section by 
0.50;
    (i) Subtracting the result from paragraph (h) of this section from 
the result from paragraph (g) of this section; and
    (j) Multiplying the result from paragraph (i) of this section by 
the AUD value established in accordance with Sec. 1437.11, and then by 
55 percent.


Sec. 1437.404  Information collection requirements under the Paperwork 
Reduction Act; OMB control number.

    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control number for the 
regulation in this part is 0560-0175.

    Signed at Washington, DC, on March 8, 2002.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 02-6212 Filed 3-18-02; 8:45 am]
BILLING CODE 3410-05-P